30% of mining equipment has already left Kazakhstan
In 2021, Kazakhstan was the world's second largest crypto mining player. The country will drop in this ranking. The fault in particular of the taxes imposed on minors in the country. Already, 30% of Bitcoin mining hardware has left the country…
Until very recently, Kazakhstan was one of the world leaders in Bitcoin mining. The situation is about to change for the country. Find out why.
Kazakhstan Is Emptying Itself Of Its Miners
According to figures from the National Association of Blockchain and Data Center Industry, 30% of the country’s mining equipment has gone overseas. The country therefore faces an exile of crypto miners. Why ?
According to the association mentioned above, there are several reasons for this. First, the government of Kazakhstan is reportedly about to increase its taxes on Bitcoin miners. There is talk of a tax of around $0.02 per kilowatt hour (kWh) of domestic electricity. The tax is $0.01 per kWh for electricity that would be imported.
Electricity generated from natural gas and renewable energy will be taxed approximately $0.06 per kWh. This is not the first time the country has imposed taxes on minors. This was already the case in 2021 in the city of Nur-Sultan for example. But at that time the tax was much lower.
Kazakhstan Did Not Benefit Long From The Exile Of Miners From China
Kazakhstan had been one of the big winners from the exile of minors from China from May 2021. But it is clear that the situation has changed a lot in the country since then. The political situation has become very fragile with a government questioned by part of its population .
The unrest led to massive power cuts and crypto miners, large electricity consumers, were soon singled out. As a result, the government ordered the closure of several mining centers in the country . Moreover, a significant part of the electricity is now imported from Russia.
Now with the coercive tax framework mentioned above, the situation has turned unfavorable for Bitcoin miners in Kazakhstan . This will therefore have an undeniable consequence in terms of the country’s hashrate (mining power). As a reminder, in the latest Cambridge study in August 2021, Kazakhstan is the second largest crypto mining player in the world, behind the United States. The hashrate of the country was then 18%.
The question now is which countries will take advantage of this plate tectonics? We should know soon since the new Cambridge study on the distribution of mining will arrive in a few days. Some analysts envision the United States, Canada and Germany becoming the new leaders in crypto mining.
“[Kazakhstan] is becoming an unfavorable jurisdiction for the crypto mining business” Alan Dorjiyev, President of the National Association of Blockchain and Data Center Industry